The Petroleum Products Retail Outlets Owners Association of Nigeria has said intense competition in petrol pricing led to losses running into billions of naira for its members in 2025.
The association said frequent pump price changes created uncertainty in the market and squeezed profit margins for retail outlet operators, even though consumers enjoyed temporary relief.
PETROAN stated that the price instability ultimately hurt long-term sustainability and weakened investment confidence in the downstream petroleum sector.
These observations were contained in a statement signed by the President of PETROAN, Dr Billy Gillis-Harry, and the Publicity Relations Officer, Dr Joseph Obele, while reviewing the performance of the petroleum sector in 2025 and outlining expectations for 2026.
“The downstream sector experienced intense price competition between petroleum importers and local refiners. This price war led to frequent pump price adjustments resulting in losses of billions of naira to our members, market uncertainty, and reduced margins for retail outlet operators,” the group said.
Reviewing crude oil production, PETROAN noted that Nigeria recorded a modest recovery during the year, attributed to improved security measures, enhanced pipeline surveillance and partial restoration of previously shut-in assets.
It said average crude oil output in 2025 stood between about 1.3 million and 1.5 million barrels per day, including condensates, but remained below the country’s OPEC quota of roughly 1.7 to 1.8 million barrels per day.
According to the association, persistent oil theft, pipeline vandalism, aging infrastructure, operational inefficiencies, limited upstream investment and funding challenges continued to weigh on production levels.
PETROAN stressed that higher crude production is vital for sustaining domestic refining, boosting foreign exchange earnings and ensuring stability in downstream supply.
On the naira-for-crude initiative, the group said the policy holds strong strategic potential to stabilise the downstream sector, but its impact in 2025 was limited by operational and regulatory hurdles.
While calling for improved transparency, timely crude allocation and better pricing alignment to unlock the policy’s full benefits in 2026, PETROAN recalled that the naira-for-crude arrangement was introduced to ease pressure on foreign exchange and support local refining by allowing domestic refineries to pay for crude oil in naira.
It disclosed that about 250,000 to 300,000 barrels of crude oil per day were allocated to local refineries under the policy, helping to reduce foreign exchange demand by importers, support steady refinery operations and encourage greater private sector participation.
However, the association said delays and inconsistencies in crude allocation disrupted refinery operations, while other challenges also undermined the policy’s effectiveness.
“Some refiners reported that the naira pricing mechanism did not align with international crude price fluctuations, affecting profitability.
“Limited awareness and adoption: Not all refineries fully participated, reducing the policy’s potential impact.
“Ongoing pipeline vandalism and production shortfalls sometimes limited crude availability, hampering refinery output,” the group said.
PETROAN further disclosed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority continued to approve private refinery projects in 2025, leading to the issuance of 30 refinery licences since the Petroleum Industry Act came into force, with about 23 refineries currently under development.
It said the projects, when completed, are expected to add more than 850,000 barrels per day to Nigeria’s domestic refining capacity, complementing the Dangote Petroleum Refinery and significantly reducing dependence on imported petroleum products.